House Repossessions Rocket
The state of the UK housing market is constantly in the news at present and the latest figures on home repossessions make more depressing reading.
In the year 2008 repossessions reached the highest levels for 12 years. A staggering 54% rise in instances of homeowners losing their homes equates to 40,000 houses being repossessed.
The worsening economic climate has had a major impact on the way people are able to live their lives, with many redundancies evident, and it is clear there is more to come. The Council of Mortgage Lenders, which researched and presented the figures, had forecast a higher number by some 11%, and point to this fact as an indication that repossession is very much the final act.
Interesting figures suggest that while mortgage arrears is becoming a more commonplace occurrence, the majority of lenders are working very closely with borrowers to try and alleviate the situation. For instance, while the number of people in arrears rose by over forty percent last year, the proportion of mortgage holders in arrears represents just one and a half percent of total homeowners.
More worrying, and perhaps indicative of an impending increase, is that 20% of the rise occurred in the final months of the year. Indeed, the forecast is for 75,000 homes to be repossessed in the coming year, an increase of 90% on this years figure. The highest figure seen was 75,500 during 1991, the last major market crash.
There is much important advice for those who fear they may go into arrears, and the first is to talk to the mortgage lender. This allows agreement to be met in the short term, and for the homeowner to sell, if necessary, at a better price than would be achieved at auction.
One worrying trend that lenders and industry insiders have seen a rise in is that of people simply abandoning their homes, or handing back the keys. Experts advise strongly against this, as it does not alleviate any of the outstanding debt.
Late last year the government promised to initiate a scheme to help people in this situation. Homeowner Mortgage Support, as the scheme is to be known, is still not up and running and the deepening levels of debt and repossession should be an incentive to the government to implement something imminently.
The director general of the Council for Mortgage Lenders, Michael Coogan, expresses some concern at the state of affairs:
“Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, both lenders and government are continuing to find more ways to help more people stay in their homes. But there seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties. We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests.”
So, if you are suffering with mortgage arrears and concerned over having you home repossessed seek professional advice as early as possible.
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